24 Last word DAVID McWILLIAMS ThefirstvictimofAI? Theeconomy W e are in an era of great technological advances, or so say all the tech bros who are championing not just AI, but a whole host of technological innovations from finance and healthcare to supply chain management and communications. In spite of recent stumbles, the share prices of tech companies continue to soar, sucking more and more money into the great Silicon Valley bonanza. Ireland benefits enormously as Europes, maybe the worlds, most Silicon Valley-adjacent economy by virtue of all the tech companies based here. The promise of AI, and the reason a few big firms are betting billions on it, is to make the economy more efficient. Robots will do the jobs that used to be done by millions of people. When you think for a moment about this, you must conclude that we are facing an era of mass deflation, where prices fall across the Themostobviousfinancial implicationofAIwillbemass debtdefault,bankruptcies, bankfailuresandchaosinthe internationalfinancialsector board. If this happens, how will we repay all the debt we have accumulated? This column is about to tell you that possibly the most obvious financial implication of AI will be mass debt default, bankruptcies, bank failures and chaos in the international financial sector. Bear with me, as I outline how this happens. All technological innovations are deflationary because what drives all technology is efficiency. Efficiency is a fancy word for getting more out of less. At the forefront of every period of technological innovation is falling prices thats what getting more out of less means. As prices fall, driven by productivity, wages fall too. In the case of AI, if the promise is to replace wage-earning humans with robots, the impact on falling wages will be more pronounced Weekend editor: Mary Minihan than anything we have seen before. As most peoples income comes from their wages, this means a significant destruction of ordinary peoples income. In terms of debt dynamics, income is the font of all solvency; without income, you cant pay back your debts. In a world that is now carrying more debt than ever before, the first victim of AI will be solvency. Let me give you a historical example of how technological innovation causes deflation. Between 1870 and 1900, wages and prices across the globe fell constantly. This is what economists call a supply-side deflationary shock. Prices dont fall because demand falls, they fall because we get better at making things cheaper. This period was marked by rapid improvements in key technologies such as rail and steel. Rail freight rates (a cornerstone of the economy at a time when goods production drove economic activity) in the US fell from about 3 cents per tonne-mile in 1870 to about 0.75 cents by 1900. Steel saw a huge boom in output over the same period. American steel production exploded from about 10,000 tonnes in 1869 to one million tonnes in 1880 with 90 per cent of this steel going toward railroads, the AI of the time. The price of steel dropped by over 50 per cent between 1867 and 1876, fuelling massive growth in the output. Out on the farms, a surge in mechanised agriculture pushed up yields and pushed down prices, in America, corn sold for 83 cents per bushel in 1881 and by 1890 was only 28 cents a bushel. Wheat dropped from $1.19 in 1881 to 49 cents per bushel by 1894. Cotton production also doubled over the period causing prices to fall from 15 cents to 6 cents. Innovations in refrigeration and a significant reduction in trans-Atlantic travel costs meant that all this surplus American grain flooded into Europe, massively reducing the incomes of European farmers. For example, the value of agricultural land in Ireland and England fell by 50 per cent in the 30 years to 1900, impoverishing the landlord class and leading to an explosion of financially strategic marriages between posh English and Anglo-Irish gentry to American heiresses with large dowries. Winston Churchill is the product of one such arrangement. Lord Fermoy, once an Anglo-Irish bigwig, married the daughter of American stockbroker Frances Ellen Work in what were called cash for coronets deals. The Americans got the titles and the landlords got the loot. This couple ended up being the great grandparents of Princess Diana and are direct ancestors of the next king of England. Rich Americans were operating a loot-for-legacy global stud farm, because, as always in periods of deflation, the return to financial assets rises relative to everything else. As prices fall and output rises, profits rise, driving up asset prices. On top of that, the lower interest rates associated with the lower levels of inflation, make borrowing cheap, so leverage increases. If you are among the few already rich, you can get your hands on these assets as they rise in value. One more thing to consider was that the 1870-1900 period was kicked off by the crash of 1873, and a massive slump in railway stocks. After the crash in their share price, railway building slowed, but despite this slower pace, railways continued to change the world. AI will do the same, but the AI share mania of today will slump. The shares that fell in 1873 were snapped up by rich Americans who had stayed on the side-lines during the mania. These were the people who had the moolah to pay the dowries to the improvised poshies, whose wealth was destroyed by the fall in land prices in Europe. AI will almost certainly follow the railways of the late 19th century and, as was the case then, the legacy will be deflation not inflation. This brings us to debt. If we are facing wage falls, who pays back the debt? Global debt (private and public) recently hit a record high of $353 trillion, with $29 trillion added last year alone. Two-thirds of this rise in global debt was incurred by rich countries governments trying to soften the blow of losing competitiveness. Borrowing to cover lost income can only last so long. Something will give. The most likely trajectory is that the AI bubble bursts, which may already be happening, triggered by the crash in Korea in recent weeks. This is followed by wealth destruction in America as the Americans have bet the Wall Street house on Silicon Valley. Thereafter, the productivity rise associated with AI ensures that deflation sets in, unemployment rises as AI replaces the service jobs of the clerical middle (consultants, lawyers and administrators), leading to falling tax revenue and mass debt defaults. Welcome to the 2030s. Email: weekend@irishtimes.com Address: PO Box 74, 24-28 Tara Street, Dublin 2, D02 CX89 THE IRISH TIMES Weekend Saturday, August 1, 2026 DavidSedarisontheseriousbusinessofcomedy.Page8 WalledtownsofIreland:RositaBolandvisitsWexford.Page10 PatrickFreyne:GlenHansardwasIrelandsbandleader.Page5 WEEKEND THE IRISH TIMES Saturday, August 1st, 2026 A WOUND IS HEALED Afterdecadesofheartbreakandnearmisses, Mayofinallyhasitsmomentinthesun By 2 Cover story A HOUSE OF PAIN NO MORE MayosAll-Irelandtriumphreleased75yearsof pent-upemotioninoneunforgettableafternoon ByKeithDuggan M acHale Park in Castlebar has always been best suited to those Saturday-night matches in winter, when the season is young and the promise uncontained. An ideal Cover story meme, the jokes came thick and fast. Through all that, Mayo footballers and supporters never shied away from speaking about it, nor returning to All-Ireland finals. Maybe we make too much of the football, Fr Leo Morahan, the former county board executive, said back in 2007. Mayo has the 4 Cover story 2004, when he was beginning his sec- ond term as Mayo manager. By September, he had the county back in an All-Ireland final, when Kerry defeated his young team. Like most GAA counties, the network of names and connections within Mayo football are impossibly dense: you could fill the People GLEN HANSARD WAS OUR NATIONAL BARD TheFramesfrontmanwasIrelandsbandleader, anditfeltlikehewouldbedoingthejobfor alongtime ByPatrickFreyne I n the 1990s, I wasnt convinced by The Frames. They felt a bit mainstream. A bit major label. I was a young idiot. Later, a friend convinced me that I 6 Music THE PIANIST WHO PLAYS WITH ONE HAND ONLY Freya Terris is the first pianist to pass their Grade 8 piano exam playing solely with their left hand ByJohnOConnor L ike countless other young musicians, Freya Terris discovered her love of music at the piano stool. Yet her journey has been anyt People 7 Fearkeptmefrom doingwhatIreally wantedtodoorsay Q&ARevJanetBroderick The Donegal-based priest on childhood games with her brother actor Matthew Broderick, how people react when she preaches sermons, and who could play her in a biopic Howagreeableareyou? I think life has made me agreeable 8 Interview I DONT LIKE EXTREMISTS. BUT I FIND THEM THRILLING AS CHARACTERS TheUSwriterandhumouristtalksabouttheseriousbusinessofbeingfunny onthepageandathislivereadings ByPatrickFreyne WEEKEND INTERVIEW DAVID SEDARIS A few days after I interview David Sedaris, I receive a thank-you postcard fe Interview 9 I just tried to get through my days [at school] without being found out as gay. Im 69, so no one even really imagined then that anyone could be anything that awful back then DavidSedaris: Idontknowhow tobuyaplane ticket.Idontopen anymailthat doesntlooklike fanmail. Photograph: Leonardo 10 Feature HISTORY EMBRACES US EVERY DAY IN WEXFORD In the first of a four-part series on Irelands walled towns, we visit Wexford, where history is quite literally in peoples back gardens ByRositaBoland I f Billy Colfer talked to you about history, youd sit up and listen, Paul Walsh tells me. W Feature field. We discovered that Sparrow was a surname of ship owners back in the 1830s, Hussey says. Hussey brings me out into their back garden to show me where, more than a century ago, a house was built against the other side of their wall. The medieval wall thus became a party wall. It towers 12 Photo essay Formedtotacklethe siltingissueintheriver Liffey,thereservenow extendstotheentirety ofthebay WILD AT HEART Photographs: DaraMacDónaill andEndaODowd Words: EndaODowd O f the 797 Unesco biosphere reserves across 147 countries, Dublin Bay is the only one to include a national capital Photo essay DublinsNorth BullIsland,partof theDublinBay Unescobiosphere reserve,isnow hometo180 differentspeciesof bird.However, conservationists warnthat,asworks tostopcoastal erosionareerected alongthecoastline, theirlong-term impactonthe ecologyand landscapemaybe difficulttopredict. Photographs: 14 Feature TWINS PEAK WERE PROBABLY MIRROR IMAGES OF EACH OTHER Whetheritsthehighsofalwayshavingcompanyor thelowsofsensingtheotherspain,thebestpartof beingatwinisneverbeingstuckforafriend ByJenHogan I relands birth rate may be falling, but the incidence of twin births continues to rise, with al Feature 15 Its sometimes fun and its sometimes not, because they could steal your stuff had a friend beside you. In fact, the twins only really went their separate ways when they went to college and that was a major shock, Emma says. Rebecca says there are lots of upsides to being a twin, but the T 16 Essay he vintage front page shows a street full of Dublin holidaymakers smiling at the camera, sitting on the kerb, waiting for the bus in the sun. But these early queues soon dissipated. Bank holiday spoiled by weather, announces the reusable headline. The citys thoroughfares were WEEKEND E Essay 17 Governments might fancy deploying bank holidays to foster cohesion and goodwill, but that doesnt mean everybody has to play along crashing out of the Fifa World Cup was that Friday, July 24th, became the bank holiday that never was. Would Keir Starmers mooted last act have applied across 18 Feature BE LIKE JOHN LENNON AND BUY AN IRISH ISLAND Four islands for sale off Mayo, Donegal, Tipperary and Galway, with bidding starting at 299,000 ByJessicaDoyle W hen you attract screaming fans everywhere you go, what do you do to get some peace and quiet? You buy an island, of course. Tha People 19 SARAH MOSS Teenage dieting made me an expert in mental arithmetic I bofin. It is suitable for grazing and features two natural freshwater lakes. The island measures 1.2km by 0.4km and rises to a maximum height of 63.3m above sea level. It is a Special Protection Area under the EU Bird 20 Environment TOMAÍ Ó CONGHAILE Our beautiful, troubled planet needs a skilled reconciler T he World Cup may be over but the fallout continues: Trumps unwanted interventions; Germanys early exit; football not coming home; Argentinas post-final petulance. Not to mention, of course, that banner. Environment 21 British navy, spent several days imprisoned in the Tower of London on corruption charges, and died of smallpox before reaching 40. Initially, a strait running between the two main islands was named after him and, by 1765, the Falkland Islands had become the English name for the entire 22 Obituaries FIRST WOMAN DIRECTOR OF A NATIONAL INSTITUTION, LIBRARIAN AND ACADEMIC Patricia (Pat, Patsy) Donlon Born: January 28th, 1943 Died: July 23rd, 2026 Patricia (Pat, Patsy) Donlon, who has died peacefully aged 83 at Blackrock Hospice, Dublin, was a leading light in that remarkable generat Obituaries 23 RENOWNED ORNITHOLOGIST AND COMIC ACTOR WHO STARRED IN THE GOODIES Bill Oddie BillOddiewasamemberofcomedy trioTheGoodies,whoseanarchicTV sketchshowairedinthe1970sand 1980s.Photograph:IanGavan/Getty Born: July 7th, 1941 Died: July 25th, 2026 Bill Oddie, who has died aged 85, was a mul 24 Last word DAVID McWILLIAMS ThefirstvictimofAI? Theeconomy W e are in an era of great technological advances, or so say all the tech bros who are championing not just AI, but a whole host of technological innovations from finance and healthcare to supply chain management and communications. In